Redcare Pharmacy sees strong Rx growth as margins stay on track

Investing.com -- Redcare Pharmacy on Wednesday reported encouraging third-quarter results with adjusted EBITDA margin of 2.4% falling within its target range of 2.0-2.5% after the first nine months of 2025.

The company confirmed its full-year 2025 targets with only eight weeks remaining in the calendar year, suggesting confidence in accelerating prescription (Rx) growth to over €150 million in the fourth quarter.

Redcare’s third-quarter adjusted EBITDA reached €17.1 million, broadly in line with consensus expectations of €16.7 million. The underlying gross profit margin decreased by 100 basis points year-over-year to 22.1% in Q3.

The adjusted EBITDA margin of 2.4% was down 17 basis points quarter-over-quarter, which was anticipated due to enhanced Rx bonus marketing efforts after summer.

In the DACH region (Germany, Austria, and Switzerland), the adjusted EBITDA margin came in at 3.0%, down 6 basis points year-over-year and 49 basis points quarter-over-quarter. International sales grew by 25% year-over-year with a negative adjusted EBITDA contribution of -€0.5 million, representing an improved margin of -0.4%.

The company’s free cash flow stood at -€84 million in Q3, while cash levels increased to €266 million compared to €178 million in December 2024.

German Rx sales showed strong performance, rising to €126 million in the third quarter, up 82% year-over-year with a clear sequential acceleration of €12 million added quarter-over-quarter compared to €6 million in Q2. Non-Rx sales reached €448 million, up 17% year-over-year.

In the DACH segment, Non-Rx sales grew 13% year-over-year to €315 million, slightly below forecasts but maintaining solid momentum. The customer base expanded by 200,000 to 13.7 million, a slower pace compared to the 400,000 additions in the second quarter.

Redcare Pharmacy reiterated its full-year 2025 guidance, expecting total sales growth exceeding 25%, German Rx sales surpassing €500 million, Non-Rx sales growth of more than 18%, and an adjusted EBITDA margin between 2.0% and 2.5%.

At the midpoint of guidance, this implies adjusted EBITDA of approximately €67 million for the full year, with Q4 contributing €22 million at an implied margin of 2.7%. The company confirmed that new direct bonus activities are not adding to the budget but are being funded through reallocation of the existing marketing budget.

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